Rbs - Round Up - 140809

This material has been produced by RBS sales and trading staff and should not be considered independent.

The Round Up 14 August 2009 Issue No. 155 The Round Up is a comprehensive daily note produced by the RBS Warrants team providing an overview of market movements along with quality ideas for warrant traders and investors.

In today’s issue Global Market Action

Scoreboard

Aussie Market Action

SPI Comment, Events & Dividends

CBA (CBAWZQ)

Trading Sell – Overbought after result

SUN (SUNKZM)

MINI Trading Buy – Value in insurance

SLF (SLFSZX)

Self Funding Investment – property sector

Round Up Corner

NEW – Self Funding Instalments Listing

Equities Move

Last

% Move

Range

Volume

ASX 200

+92.8

4435.9

+2.1%

u.c to +93

$6.0 bn(H)

SPI - yesterday

+105.0

4402.0

+2.4%

+31 to +112

28,147(A)

Dow Jones

+36.6

9398.2

+0.4%

-56 to +45

Low

S&P 500

+6.9

1012.7

+0.7%

-5 to +7

Avg

Nasdaq

+10.6

2009.4

+0.5%

-12 to +15

Avg

FTSE

+38.7

4755.5

+0.8%

u.c to +73

Avg

Commodities Move Oil-WTI spot

Last

% Today

% Past Month

+0.89

71.05

+1.3%

+18.9%

Gold Spot

+7.80

954.90

+0.8%

+3.7%

Nickel (LME)

+43.45

931.37

+4.9%

+40.2%

Aluminium (LME)

+3.42

91.96

+3.9%

+32.3%

Copper (LME)

+8.78

289.53

+3.1%

+30.3%

Zinc (LME)

+2.73

85.42

+3.3%

+33.0%

Silver

+0.49

15.03

+3.4%

+16.8%

Sugar

-0.76

22.21

-3.3%

+26.6%

Dual Listed Companies (DLC’s) Move

%Move

Last

AUD Terms

NWS (US)

+0.09

+0.7%

13.01

RIO (UK)

+97.5 p

+4.2%

BLT (BHP UK)

+35.0 p

+2.3%

BXB (UK)

+4.5 p

+1.4%

£3.283

Diff to Aus

15.46

-17.4 c

£24.10

47.47

-1133.3 c

£15.900

31.32

-693.7 c

6.47

+1.7 c

American Depository Receipts (ADR’s) Move

%Move

Last

BHP (US)

+1.86

+2.9%

AWC (US)

+0.22

+3.7%

TLS (US)

+0.18

+1.2%

ANZ (US)

+0.55

+3.3%

WBC (US)

+4.33

+4.4%

NAB (US)

+0.86

+3.9%

LGL (US)

+0.24

+1.1%

AUD Terms 65.06

Diff to Aus

38.65

+38.6 c

6.15

1.83

+0.2 c

15.22

3.62

+5.6 c

17.15

20.37

+17.4 c

102.10

24.26

+0.9 c

22.81

27.10

+14.8 c

22.31

2.65

+3.0 c

RMD (US)

-0.14

-0.3%

45.32

5.38

-14.6 c

JHX (US)

+2.38

+11.4%

23.23

5.52

-3.1 c

PDN (CAN)

+0.25

+6.1%

4.32

4.72

+17.7 c

Overnight Commentary United States Commentary The US indices managed to holf their previous gains and the Dow added a further 36.6pts, despite slightly disappointing eco data, as it seems to be general consensus that the US has moved past the worst this quarter. Eco - Retail Sales slipped in July, -0.1% vs +0.8% exp'd, after being +0.8% previously, and Retail Sales ex.Autos was -0.6% vs +0.1% exp'd. While Jobless data was mixed Initial Claims at 558k vs 545k forecast, from 554k, but Continuing Claims better at 6202k vs 6300k exp'd, down from 6343k previous. Also a better Business Inventories number in June -1.1% vs -0.9% forecast, after a 1.2% fall in May. Fins - Financials gained as the Libor-OIS spread narrowed to 25 basis points a level Alan Greenspan has previously considered "normal". The sector also benefitted from reports that John Paulson's hedge fund, that had large returns on picking the failure of subprime mortgages, had bought decent stakes in Bank of America (gained 6.7%), Regions Financial (up 7.9%) and Goldmans Sachs (rose 0.4%). Resources - Alcoa gained 5.8% after a stronger night from the commodites, boosted by the combination of Fed comments that the recession is easing and unexpected increase in 2Q growth from France and Germany. Also saw a solid session from Schlumberger, up 2.3% and Halliburton, up 2.8%. Retail - Wal-Mart gained 2.7% and was the biggest pts contributor on the Dow, adding 10.4pts, after it reported better-than-expected 2Q earnings, over shadowing a slump in official retail sales numbers. Homebuilders - DR Horton lost 3.7% after it was downgraded by one broker to 'sell', from 'hold', after it's 50 percent rise over the last month. KB Homes also fell 2.5% after being downgraded to 'underpeform by another shop.

United Kingdom & Europe Commentary The FTSE 100, up 0.8% or 39pts, hit a fresh 10 month high as positive GDP data from Germany and France lifted sentiment. The FTSE Eurofirst 300 was up 0.7%, the DAX added 1% and the CAC rose 0.5%. Eco - The German and French economies unexpectedly grew in the second quarter bouncing back from previous GDP readings of 3.5% from the Germans and -1.3% for the French, raising hopes that the worst of the economic crisis is coming to an end in the eurozone. German GDP was +0.3% and French GDP was also up 0.3%. Forecasts were for German and French GDP to be down 0.2% and 0.3% respectively. UK Banks - The sector was in demand with the positive sentiment helping. Barclays, HSBC, RBS and Lloyds were up between 2.8% and 1.7%.

Euro Banks - The positive eco news also helped the Euro banks with UBS jumping 5.4%, Credit Suisse added 3.1%, BNP rose 1.2%, SocGen was up 2.9%, Deutsche Bank climbed 2.5% and Banco Santander ended 0.6% higher. Insurers - Prudential, up 10.7%, led the sector higher after increasing its interim dividend. Peers Aviva, Legal & General, Old Mutual and Standard Life added 0.4% to 4.4%. Beverages - Anheuser-Busch InBev sank 6% as a grim outlook offset strong 2Q results. Dutch brewer Heineken, which reports on August 26, fell on the back of the poor outlook, losing 2.8% but Danish rival Carlsberg rose 1.1%. Property - Takeover rumours helped the sector with talk that both Land Securities, up 4.9%, and British Land, up 2.5%, were being looked at. The FTSE Real Estate index is up 33% in the past month and some market commentators are saying the companies may actually take advantage of the recent gains and raise capital.

Resources Commentary Miners - The sector tracked metal prices higher on increased demand hopes. BHP rose 2.25%, Rio added 4.2%, Anglo was up 3.1%, Xstrata jumped 6% and Vedanta was 3.5% higher. Energy - Oil and gas services firm Petrofac was a big blue-chip riser, up 8.9% as the stock was added to the MSCI UK index. Elsewhere the majors were weaker, BG Group, BP and Shell were down between 0.3% to 1.1%.

SPI Commentary The SPI traded up 105 pts or 2.44% to 4402. Open at 4336 with a low of 4328 and a high of 4409. Volume 29,164. Overnight the SPI traded up 41pts to 4443.

SPI Intraday

SPI Daily

*SPI report taken from the 9:50am open to the 4:30pm close on the previous trading day. Charts taken from IRESS

Upcoming Economic Events for the Week Monday

AUS

Owner occupied housing finance, investor housing finance

US Tuesday

AUS

NAB Business confidence, NAB Business conditions

US Wednesday

Non-farm productivity

AUS

WMI consumer sentiment, wage price index

US Thursday

Wholesale inventories, trade balance

AUS

AWOTE

US Friday

Fed funds rate decision, import prices, retail sales

AUS

RBA Governor testifies on monetary policy

US

Buisiness inventories, CPI, industrial production, Michigan consumer conf

*Dates are indicative only and may change

Upcoming Dividends ExDivDate

Security

Description

Div (c)

Yield

Frk(%)

PayDate

17-Aug-09

AXA

AXA Asia Pacific

9.25

4.25%

30.06

24-Sep-09

3-Sep-09

NWS

News Corp

6

0.9%

0

14-Oct-09

Trading Sell: Commonwealth Bank (CBAWZQ) – Overbought after result CBA reported this week and has rallied 8% in 2 days. The stock is set to go ex dividend on Monday, $1.15. While the result demonstrates that we may be within six months of seeing a peak in BDDs, the stock looks overbought and may be set for a pullback post dividend. RBS Research prefer NAB and ANZ. Play a pullback in CBA thorugh CBAWZQ.

Source: IRESS

• • • • • • • •

CBA’s cash NPAT of A$4,415m was cA$150m ahead of RBS forecasts driven by a lower tax rate partially offset by higher BDDs CBA declared a final dividend of A$1.15ps in line with guidance provided at their 3Q update. The total dividend of A$2.28ps was 14% below FY08. The key positive surprise was the strength in revenue and, in particular, in fee income. The key negative was the benefit from the artificially low tax rate which is expected to normalise to c27% going forward. The tier-1 capital position of 8.07% is looking a bit thin, though is likely to be addressed by the issue of hybrid equity adding c24bp. The outlook was understandably cautious given headwinds still exist around credit growth and unemployment and in the absence of similar fee growth to pcp. RBS valuation becomes A$41.88 CBA set to go ex dividend on Monday, take a position today to caputre any profit taking that occurs post dividend through CBAWZQ

RBS MINIs over CBA

Security CBAKZK

ExPrc

Stop Loss

1936.76

2126

CP

ConvFac Long

1

Delta

Description 1

MINI Long

CBAKZN

2775.8

3047

Long

1

1

MINI Long

CBAKZO

2401.61

2636

Long

1

1

MINI Long

CBAKZT

5155.27

4871

Short

1

1

MINI Short

CBAKZZ

5497.42

5226

Short

1

1

MINI Short

RBS Warrants over CBA Security CBASZW

ExDate

ExPrice

CP

ConvFac

4-Feb-19

1866.78

Call

CBASZX

4-Feb-19

1444.23

Call

CBAVZA

27-Aug-09

3600

Call

CBAVZB

24-Sep-09

3800

Call

CBAVZC

24-Sep-09

4000

CBAVZD

29-Oct-09

4200

CBAVZE

29-Oct-09

CBAVZF

26-Nov-09

1

Delta

Description 0

Self Funding Instalment

1

0

Self Funding Instalment

5

0.2

Trading Call Warrant

5

0.1942

Trading Call Warrant

Call

5

0.1847

Trading Call Warrant

Call

5

0.1599

Trading Call Warrant

4400

Call

5

0.1386

Trading Call Warrant

4800

Call

5

0.0949

Trading Call Warrant

CBAVZG

26-Nov-09

4500

Call

5

0.1263

Trading Call Warrant

CBAWZQ

27-Aug-09

4500

Put

5

-0.0426

Trading Put Warrant

CBAWZR

24-Sep-09

3500

Put

5

-0.0001

Trading Put Warrant

CBAWZS

29-Oct-09

3800

Put

5

-0.0067

Trading Put Warrant

CBAWZT

29-Oct-09

4000

Put

5

-0.0164

Trading Put Warrant

CBAWZU

26-Nov-09

3600

Put

5

-0.0055

Trading Put Warrant

CBAWZV

26-Nov-09

4200

Put

5

-0.04

Trading Put Warrant

MINI Trading Update: Suncorp Metway (SUNKZM) – Value in insurance We have been bullish SUN since the stock broke through ressitance at $6.75. SUN has continued its rally since then thanks to talk of selling its banking assets, which RBS Research believe could unlock additional value for shareholders. SUNm announced its expected results on Friday with the key takeaway being that bad debts did not deteriorate further, which has positive implications for a potential divestment of SUN’s banking operations. While Insurance and Life were behind RBS Research expectations, the negative surprises were largely oneoff in nature. RBS Research believe there is further upside from here and retain Buy call with a new target price of $8.80. Buy SUNKZM

Source: IRESS

Early release of FY09 result • The key positive from the result was the narrowing of the bad debt guidance from 125-145bp to 125-135bp which has lifted banking NAPT expectations • Insurance suffered from the negative impact of marking-to-market the bond portfolio which was was greater than RBS Research had anticipated and the insurance margin guidance of 7.5-8% was also behind expectations. • The weakness in Life insurance was mainly due to the rapid unwinding of discount rate changes and is largely oneoff so not of particular concern. • The outlook for bad debts in Australia appears to be improving along with the macroeconomic situation. As a result, RBS Research have nudged up banking valuation multiple from 0.9x book value to 1.0x, which still only implies a PE of 6.4x in FY11F. • RBS price target increases from $7.38 to $8.80

RBS MINIs over SUN Security SUNKZL

ExPrc

Stop Loss 396.47

436

CP

ConvFac

Delta

Description

Long

1

1

MINI Long

SUNKZM

459.67

505

Long

1

1

MINI Long

SUNKZP

1094.16

985

Short

1

1

MINI Short

SUNKZQ

893.17

843

Short

1

1

MINI Short

Self Funding Investment: SPDR S&P/ASX 200 Property Fund (SLFSZX) – starting to run The listed property sector has been one of the biggest casualties of the global financial crisis due to their high levels of gearing, falling occupancy rates and downward property revaluations. As a result the S&P/ASX 200 property index fell ~79% from its 2007 peak. However, with property trusts now reducing debt and obtaining refinancing from the banks, the underperforming property trust sector looks worthy of investment. You can gain exposure to the S&P/ASX 200 listed property stocks through SLFSZX. SLF is an S&P/ASX 200 Listed Property exchange traded fund (ETF) which tracks the performance of the listed property stocks. Technicals

Source: IRESS

The chart above shows SLF over the past 18 months. After bottoming in March 2009, the ETF has developed a sustained medium term uptrend with higher lows and current resistance at $7.50. A breakout of $7.50 would be a bullish signal for a continued advance of the uptrend

SPDR S&P/ASX 200 Listed Property Fund (SLFSZX) SPDR S&P/ASX 200 Listed Property Fund (SLF) seeks to closely track, before fees and expenses, the returns and characteristics of the S&P/ASX 200 Listed Property Trust Index. The approach is designed to provide a portfolio with low portfolio turnover, accurate tracking, and low costs.* The Index comprises the leading listed property vehicles in Australia and represents diversified exposure to the Australian listed property market. Exposure is diversified geographically across Australia’s major population centres and by sector across a range of property types, including industrial, commercial, retail and hotel/tourism.* *Source: IRESS

The breakdown of the S&P/ASX 200 Listed Property Index is as follows: Security

Description

MktCap($)

MktWeight

WDC

Westfield Group

25,167,772,097

46.30%

SGP

Stockland

7,039,547,620

12.95%

GPT

GPT Group

4,096,636,126

7.54%

CFX

CFS Retail Property

3,553,926,494

6.54%

DXS

Dexus Property Group

3,384,606,240

6.23%

MGR

Mirvac Group

3,173,820,078

5.84%

CPA

Commonwealth Prop

1,634,763,680

3.01%

IOF

ING Office Fund

1,430,118,085

2.63%

GMG

Goodman Group

1,348,421,200

2.48%

MOF

Macquarie Office

1,016,127,900

1.87%

MCW

Macquarie Countrywid

717,642,730

1.32%

BWP

Bunnings Warehouse

580,178,793

1.07%

ABP

Abacus Property Grp.

384,546,012

0.71%

CHC

Charter Hall Group

325,218,125

0.60%

IIF

ING Industrial Fund

295,460,083

0.54%

AJA

Astro Jap Prop Trust

211,095,600

0.39%

SLF vs XJO (ex property trust) performance over the past 3 years

Source: IRESS

The chart above compares the returns from the S&P/ASX 200 – Ex-property and SLF. It can be seen that the listed property sector has been a big underperformer compared to the rest of the market and this underperformance has increased over the past month, despite property companies improving their balance sheets. Look for this underperformance to reverse as the listed property companies de-risk and sell underperforming assets.

Using SLFSZX to gain exposure to listed property index Take advantage of upside in the S&P/ASX 200 Listed Property Index through an RBS Self Funding Instalment, SLFSZX. Self Funding Instalments (SFIs) are a simple way to gain long term geared exposure to ASX-listed shares while receiving many of the major benefits of share ownership including exposure to share price movements, dividends and franking credits. KEY BENEFITS of the new RBS self funding instalments include: * NO PUT PROTECTION COST * Simple, transparent and Cost-effective * 1 for 1 movement with the underlying share (delta 1) * Gearing around 50% - Limited downside risk * No margin calls * Non-recourse loan - You can never lose more than your initial outlay * ATO product rulings - Perfectly suitable to be used in SMSF's * Listed - Can be sold at anytime * Can be exercised at any time - simply by paying back loan amount * RBS are the only product issuer in the market who can offer this product * A low interest rate of 7.46% per annum

Key details of SLFSZX Underlying

SFI Code

Instalment Payment

Stop Loss

Current Share Price

Approx. SFI Value

SLF

SLFSZX

$3.5267

$3.88

$7.38

$3.85

Reasons to buy SLF: * Listed property has significantly underperformed the rest of the market, particularly in the most recent rally * A major concern for the smaller property trusts has been refinancing debt, however banks are more likely to refinance the property trusts rather than taking the properties onto their own balance sheets and then having to manage them * Occupancy rates are still high, particularly in retail property which makes up a large proportion of the overall SLF portfolio (predominantly WDC) * Major property compmanies have undergone capital raisings to improve their balance sheets and de-risk * SLF offers an attractive yield with any franking credits an added bonus * SLF gives you exposure to the whole sector, which reduces the risk of being exposed to problems of any individual company.

STRATEGY – Using SLFSZX and WDCKZR to gain exposure to listed property ex-WDC For investors out there who are looking to gain exposure to a basket of listed property stocks without the 46% exposure to Westfield Group (WDC), a strategy to consider would be long SLFSZX and then short WDC thorugh WDCKZR MINI short. This strategy would give you upside exposure to all the stocks in SLF except WDC.

RBS warrants over SLF Security SLFSZX

ExPrc 4-Feb-19

Stop Loss 352.67

CP

ConvFac Call

1

Delta

Description 1

Self Funding Instalment

RBS Round Up Corner: Stocks Reporting This Week – COH,JBH,BHP,CBA,CPU,TLS,CCL,LEI Reporting season kicked off last week with results overall largely in line with expectation. This week some bigger names such as CBA, BHP and TLS are set to report. RBS Research are expecting company results to come in line or slightly ahead of expectations due to the long downgrade cycle over the past six months. RBS MINIs are a great way to trade company results this reporting season, from both a long or short view. Date 11 Aug 11 Aug 12 Aug 12 Aug 12 Aug 13 Aug 13 Aug 14 Aug

Code COH JBH BHP CBA CPU TLS CCL LEI

Company

Y/E

Cochlear Limited JB Hi Fi BHP Billiton Comm Bank Computershare Telstra Corporation Coca Cola Amatil Leighton Holdings

Jun Jun Jun Jun Jun Jun Dec Jun

AUD AUD USD AUD USD AUD AUD AUD

NPAT (pre abs)

(Abs)

Div

EPS

2H div

Long Product

Short Product

137.4 92.3 10506 4104.4 291.3 3979 193.5 627.0

0.0 0.0 -4466 0.0 -6.1 0.0 0.0 -218.5

170.0c 37.0c 82.0c 228.0c 23.0c 28.0c 19.0c 107.0c

241.0c 90.0c 188.8c 279.6c 52.2c 32.0c 60.2c 215.3c

90.0c 22.0c 41.0c 106.0c

COHKZB

COHKZQ JBHKZP BHPKZR CBAKZT CPUKZP TLSKZP CCLKZP LEIKZP

14.0c 43.0c 47.0c

BHPKZD CBAKZN CPUKZB TLSKZD CCLKZA LEIKZI

Cochlear Limited (COH) • The FY09 results were known to the market as COH released unaudited FY09 results on 14 July, 2009. FY09 core net profit was A$138.0m(pre-released at $137.7m), up 11.5% on pcp, and in line with the unaudited results. Core basic EPS was 233.7 cps, up 13.2% on pcp. FY09 dividend increased by 17% to 175 cps (fully franked) • The lacklustre result was due to weak cochlear implant (CI) growth (+1.3% on the pcp). FY09 CI unit sales were 18,461 with zero contribution from the Chinese donation contract. • Product sales growth overall was up 23% on pcp and 10% on pcp in constant currency terms. EBIT margin has decreased 350bp to 24.5% (vs. 28.0% in pcp). Importantly, the result included A$17.1m in losses from forex contracts. • In terms of guidance, management have not issued guidance for FY10 core earnings growth, but plan to update the market at the 2009 AGM in October. JB Hi Fi (JBH) • FY09 NPAT A$94.4m (+45.1%), on strong results in Australia & NZ. Loss on sale of Fixed Assets A$2.1m, v A$2.9m pcp. • Final dividend of 29cps representing FY09 payout ratio of 50%. This is the new target, up from 40% previously. Will likely result in 10cps uplifts to dividends going forward. • RBS Research target price increased to $20 from $17.75 BHP Billiton (BHP) • Reports in USD • While recent falls in commodity prices are likley to impact earnings, the change in costs will be a key focus as well as the management outlook for demand and prices Commonwealth Bank (CBA) • Cash NPAT of A$4,415m was cA$150m ahead of RBS forecasts driven by a lower tax rate partially offset by higher BDDs. • CBA declared a final dividend of A$1.15ps in line with guidance provided at their 3Q update. The total dividend of A$2.28ps was 14% below FY08. • The key positive surprise was the strength in revenue and, in particular, in fee income. The key negative was the benefit from the artificially low tax rate which is expected to normalise to c27% going forward. • In addition the tier-1 capital position of 8.07% is looking a bit thin, though is likely to be addressed by the issue of hybrid equity adding c24bp. • The outlook was understandably cautious given headwinds still exist around credit growth and unemployment and in the absence of similar fee growth to pcp. Computershare (CPU) • Result was in line with RBS forecasts - normalised NPAT at US$290m (vs RBS at US$291m) and EPS at US52.1c (vs RBS at US52.4c). • Guidance for the FY10 is for EPS "to be similar to" FY09. Given management's usual conservatism at the start of the year, RBS REsearch view this as positive • Free cashflow was very strong at US$319m, up 5% on pcp although this was partly due to a halving of capex to US$23m. • Interim dividend was flat at A11c (50% franked) rather than lifted by the usual 1c per half.

Telstra Corporation (TLS) • Expect the result to be at the low end of guidance, however a reliable and strong dividend will support the stock Coca Coal Amatil (CCL)

•

Strong summer should underpin double-digit 1H09 EPS growth and likely FY09 upgrades

Leighton Holdings (LEI) • Expect surprise in the provision for firm guidance for FY10, with market attention likely to return to this forgotten favourite

NEW Self Funding Instalments listing today Security

ExPrc

Stop Loss

CP

ConvFac

Delta

Description

STWSZW

$

24.50

$

26.95

Long

1

1

Self Funding Instalment

ANZSZW

$

10.50

$

11.55

Long

1

1

Self Funding Instalment

NABSZW

$

13.50

$

14.85

Long

1

1

Self Funding Instalment

BSLSZW

$

1.75

$

1.93

Long

1

1

Self Funding Instalment

WESSZW

$

13.50

$

14.85

Long

1

1

Self Funding Instalment

NWSSZX

$

8.00

$

8.80

Long

1

1

Self Funding Instalment

CSRSZX

$

1.00

$

1.15

Long

1

1

Self Funding Instalment

HSPSZX

$

2.25

$

2.59

Long

1

1

Self Funding Instalment

MINIs approaching stop loss

Share Price

Approx. MINI Value

Share: Stop Loss

Underlying

MINI Code

MINI Type

Strike

Stop Loss

LLC

LLCKZQ

Short

10

9

$

9.15

$

1.03

0.2%

WBC

WBCKZW

Short

$27.03

$24.34

$

24.25

$

2.78

0.4%

MQG

MQGKZW

Short

$51.74

$46.67

$

46.25

$

5.49

0.9%

ANZ

ANZKZU

Short

$22.99

$20.70

$

20.20

$

2.79

2.5%

CBA

CBAKZT

Short

$51.55

$48.71

$

47.53

$

4.02

2.5%

For further information please do not hesitate to contact us on the details below

Contact Equities Structured Products & Warrants Toll free

1800 450 005

www.rbs.com.au/warrants

Ben Smoker

02 8259 2085

[email protected]

Robbie Taylor

02 8259 2018

[email protected]

Ryan Corrigan

02 8259 2425

[email protected]

Elizabeth Tian

02 8259 2017

[email protected]

Tania Smyth

02 8259 2023

[email protected]

Robert Deutsch

02 8259 2065

[email protected]

Mark Tisdell

02 8259 6951

[email protected]

Trading Products Team

Investment Products Team

Disclaimer: The information contained in this report has been prepared by RBS Equities (Australia) Limited (“RBS”) (ABN 84 002 768 701) (AFS Licence No 240530) (“RBS Equities”) and has been taken from sources believed to be reliable. RBS Equities does not make representations that the information is accurate or complete and it should not be relied on as such. Any opinions, forecasts and estimates contained in this report are the views of RBS Equities at the date of issue and are subject to change without notice. RBS Equities and its affiliated companies may make markets in the securities discussed. RBS Equities, its affiliated companies and their employees from time to time may hold shares, options, rights and warrants on any issue contained in this report and may, as principal or agent, sell such securities. RBS Equities may have acted as manager or co-manager of a public offering of any such securities in the past three years. RBS Equities’ affiliates may provide, or have provided banking services or corporate finance to the companies referred to in this report. The knowledge of affiliates concerning such services may not be reflected in this report. This report does not constitute an offer or invitation to purchase any securities and should not be relied upon in connection with any contract or commitment. RBS Equities, in preparing this report, has not taken into account an individual client’s investment objectives, financial situation or particular needs. Before a client makes an investment decision, a client should, with or without RBS Equities’ assistance, consider whether any advice contained in this report is appropriate in light of their particular investment needs, objectives and financial circumstances. It is unreasonable to rely on any recommendation without first having consulted with your adviser for a personal securities recommendation. This information contained in this report is general advice only. RBS Equities, its officers, directors, employees and agents accept no liability for any loss or damage arising out of the use of all or any part of the information contained in this report. This Information is not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. If you are located outside Australia and use this Information, you are responsible for compliance with applicable local laws and regulation. This report may not be taken or distributed, directly or indirectly into the United States, or to any U.S. person (as defined in Regulation S under the U.S. Securities Act of 1993, as amended. The warrants contained in this report are issued by RBS Group (Australia) Pty Limited (ABN 78 000 862 797, AFS Licence No. 247013). The Product Disclosure Statements relating to these warrants are available upon request from RBS Equities or on our website www.rbs.com.au/warrants © Copyright 2009. RBS Equities. A Participant of the ASX Group.

Explanation of Warrant Tables: Security – refers to the code ascribed to the warrant, ExDate – refers to the date on which the warrant expires or is reset, ExPrc – refers to the exercise price, or second instalment payment, CP – tells you whether the warrant is a call or a put, ConvFac – the conversion factor of the warrant which tells you how many warrants you need to exercise in order to take possession of 1 share, Delta – tells you how much the warrant will move for a 1c move in the underlying security, Description – Tells you the type of warrant. All charts taken from IRESS unless indicated otherwise